Rental Property Insurance

Rental Property Insurance

What Every Landlord Needs to Know

Some people enjoy having a rental property to provide extra income, while others have assumed the role accidentally. Maybe they bought a new house but couldn’t sell their old one. Whatever the case, if you are a landlord, you’ll want to secure an insurance policy that covers what you need. Homeowners insurance may not be good enough.

Of course, every situation is unique. You’ll have to determine what types of coverage are right for you. Landlords insurance may cost a little more, but is worth it for what is covered.

You’ll need landlords insurance if:

  • Your rentals aren’t occasional, meaning more than a few weeks per year.
  • You don’t live in the same house that you’re renting to a tenant.
  • Your original homeowners insurance policy was issued without knowledge that you may have rentals; coverage could be denied in certain situations.

What are the differences between homeowners and landlords insurance?

Personal property. Homeowners insurance will cover all kinds of personal belongings, from electronics to furniture and clothing. Landlords insurance won’t protect anything that isn’t used to maintain the property. For instance, landlords insurance will cover items such as lawn mowers or snow blowers.

Liability coverage. A homeowners policy usually covers you and relatives who may live with you, whether or not an accident happens in your home or not. With landlords insurance, if your tenant has an accident in the rental property or on the premises, you would be found legally responsible and would need to cover the cost of medical bills, etc. Liability coverage takes care of this for you, as long as the accident occurred on your property.

If you’re thinking about getting landlords insurance, here are some of the coverage options available to you:

Comprehensive Property Coverage. This covers anything that damages your property and isn’t specifically excluded in your policy.

Named Peril Coverage. This will only cover those situations that are named in your policy—fire, hail, explosions, etc.

Inflation Protection. If you need to make repairs to your rental property, you’ll be covered even if the repair costs increase.

Liability. Again, this protects you if your tenant has an accident while on the premises of the rental property.

Actual Cash Value (Partial). If a covered peril occurs, this will cover the cost to replace or repair the damaged property.

Personal Injury Protection. This is different from liability; it involves claims made against you for injuries resulting from wrongful eviction, invasion of privacy, or wrongful entry.

Fair Value Rental Coverage. If something happens beyond your control, and you suffer a loss that’s covered in your policy, due to a weather event, explosion or fire, you’ll be reimbursed for the lost income because your tenants won’t be living in the rental anymore, and will no longer be paying you rent.

If you are a landlord, you should look into the types of discounts that may be available to you. These include getting multiple policies from the same insurance company—some of them offer discounts for multi-policy customers. There may also be rewards for having a new (less than 13 years old) or renovated rental property.

For all your home, auto and other insurance needs, please contact Zawada Insurance Agency. We work to give you comprehensive coverage at a competitive price.

Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.